IFA'S Market Commentary - GBP is strong while Euro is weak...

By IBT Staff Reporter On 04/16/09 AT 1:59 AM

Rupee: Rupee is moving as per our expectation. It strengthened to 49.63 against the greenback taking the trendline and 14 DMA resistance around 50.05 in the early trade yesterday. The bias for the local currency remains strong with immediate target of 48.90 and then to our target of 47.80. On the upside 50.20 has now become a crucial resistance above which the bias would turn neutral. Please refer to the USD INR Chart in our homepage for a clearer technical view. Bullish as long as it holds below 50.

Euro: Euro broke the rising trendline yesterday and plunged to 1.3146 (55 Daily EMA) despite the other currencies remaining strong against the buck. This suggests further downside pressure on Euro is still prevailing due to quantitative easing policy expectation from Eurozone. Sustaining below 1.3250 (21 & 100 Daily EMA) would bring a test of 1.3075. Look for short opportunities at every rise. (Eur/Usd:1.3200). Bearish.

Pound: Cable broke past the key resistance of 1.4930 (21 Weekly EMA) yesterday and surged to 1.5068 high. The charts are getting overbought, yet no clear sell signal is emerging at this point. Resistance comes around 1.5435 (38.2% of the fall) where shorts could be considered for 100-130 pips. The intraday view remains slightly bullish only a strong break below 1.4550 (55 Daily EMA) would change the view of pound to bearish again. Initiate longs around the 21 Hourly EMA at 1.4985 for intraday gain of 70 pips. (Gbp/Usd: 1.4990). Slightly bullish.

Yen: The Usd/Jpy pair retraced to 98.20 levels (as expected) where it gained support from the daily trendline and is again aiming to touch the 61.8% Retracement at 101.50. The weekly and 4-hourly stochastic is overbought and flat. Only IF Yen breaks 98.00 and holds then downside upto 96.01 (38.2%) could be observed. (Usd/Jpy: 98.25).

Australian Dollar: Aussie recovered from 0.7147 and moved higher to 0.7314 levels maintaining well above the trendline support. The daily and 4-hourly charts are getting overbought and a correction upto 0.7050-0.7120 could be seen. Initiate shorts around 0.73 levels for 70-80 pips. Alternatively, look for entering long at dips around 0.7090- 0.7120 levels for 100 pips. (Aud/Usd: 0.7158).

Gold: Gold is holding steadily below the daily and weekly trend lines and crucial moving averages. It is likely to be bearish in short term. Sell at retracements around 900 to 910 levels and book profits around $875 -$880 levels Bearish (Gold: $890.10)

Dollar index :The dollar index strengthened last week and closed above 55 days EMA, due to weakness in Euro. While it's still limited below near term resistance of 86.13, the case for resuming rally from 82.63 has been building up. We're still maintaining the view that key support of 82 level (cluster support of 61.8% retracement of 77.69 to 89.62 at 82.24 and 38.2% retracement of 70.70 to 89.62 at 82.39, as well as long term rising trend line at 82.03) intact. Break above 86.13 will set the stage for retesting 89.62 high. Though a break below 84.93 will dampen the bullish case and bring more sideway trading before an upside break out. Bullish.

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DISCLAIMER

These views/ forecasts/ suggestions, though proferred with the best of intentions, are based on our reading of the market at the time of writing. They are subject to change without notice.Though the information sources are believed to be reliable, the information is not guaranteed for accuracy.